Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 99.071 99.18-19 | EURUSD 1.3368 1.3352-65 | EURJPY 132.44 132.425-567 | AUDUSD 0.93842 0.9355-88 | NZDUSD 0.8250 0.8224-90 | USDCAD 1.04777 1.0476-88 | EURCHF 1.2317 1.2311-19 | USDCHF 0.92148 0.9200-25 | GBPUSD 1.60178 1.5985-1.6020 | EURGBP 0.83447 0.83375-64 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               99.245 | 98.945

EUR/USD             1.33675 | 1.3345

EUR/JPY               132.635 | 132.22

AUD/USD            0.9393 | 0.9367

NZD/USD             0.8288 | 0.8243

USD/CAD             1.0486 | 1.0470

EUR/CHF              1.23265 | 1.2317

USD/CHF             0.9234 | 0.9209

GBP/USD             1.6021 | 1.6000

EUR/GBP             0.8344 | 0.83395

 

Overnight News

JPY:

Japan Sep Current Acct Surplus Y587.3B; Expected Surplus Y430B

Foreign Investors Continued Pouring Billions into Japan Stocks in October

Japan Oct bank loans rise 2.0% vs. year ago

Foreigners Sold Most JGBs in Sept. Since March, MOF Data Show

Japan service sector sentiment worsens in October

AUD:

Australia Home-Loan Approvals Rise in September

RBA Says Central Banks among Buyers of Aussie Bank Covered Bonds

CNY:

China’s Reform at Critical Point: People’s Daily Commentary

China to let private investors hold up to 15% in state firms report

TWD/CNY:

Yuan Assets Are Increasing Part of Taiwan’s Forex Reserves -Central Bank

EUR:

ECB Divisions Growing Between Northern, Southern Europe, FT Says

KRW/USD:

S.Korea air force asks for stealthier jets; boosts F-35 chances

NZD:

English Looks to U.S. Recovery to Help Curb NZ Dollar

New Zealand Prime Minister Says Commonwealth Summit Boycott Isn’t ‘Right Move’

For today

USDJPY:
Topside: 99.30-99.60 light offers 99.60-100.00 light mix 100.00-100.30 large mix
Downside: 98.90-99.00 light bids 98.60-98.90 light sell stops 98.50-98.60 light mix 98.20.98.40 light sell stops
EURUSD:
Topside: 1.3380-1.3400 light offers 1.3400-1.3430 light mix 1.3430-1.3460 light buy stops
Downside: 1.3300-1.3320 light bids 1.3280-1.3310 light sell stops 1.3240-1.3280 light mixed bag

EURJPY:
Topside: 132.70-133.00 light buy stops
Downside: 131.60-131.90 light bids

AUDUSD:
Topside: 0.9420-0.9430 light offers 0.9440-0.9470 light mix

Downside: 0.9330-0.9350 light bids 0.9300-0.9330 light bids

 

  • EUR: The Euro opened below the closing levels on Friday and traded to the mid 1.3340’s before finding some bidding moving into the market. As you would expect after two days of hectic trading the market was a little void of interest and struggled to find anything meaningful to grasp on and a lack of data from Europe today keeps the market muted and awaiting the usual comments by someone in the US or Europe as one or the other carries on piling pressure on the market to weaken one or the other. For the moment the market has moved off the lows filling the small gap left from the opening before settling into quiet trading around the 1.3360 area as we move towards the grey hours. Divisions within the Eurozone are likely to dominate the London session with the split not limited to the Northern states vs. the Southern states, concern over a common backlash in Germany.
  • GBP: Cable was very little different to the Euro with weak volumes for the session so far. Opening around the 1.6008 levels the market held above the 1.6000 level in early trading before moving to fill the gap on the charts on the Tokyo opening, we then extended to above the 1.6020 as EURGBP remained static for the most part and have ranged around the 1.6015 area for several hours in a quiet session.
  • JPY: USDJPY opened roughly in line with Fridays close and initially tested higher running into some offers above the 99.20 during pre-Tokyo having pushed through on the opening the market immediately gave ground and moved down to bounce off near term bids around the 98.95 area before settling into a tight range from the lows to 99.00 area into the grey hours. While the current account data remains on the weak side this is nothing new and the market for the most part ignored the number remaining quiet and tight.
  • AUD: While the ranges have been a little more impressive in the AUD than anything else the market still remains fairly quiet overall, opening around the 0.9385 areas the market traded lower from the opening pushing down below 0.9370 level as early sellers closed medium term longs, once the interest was exhausted the market again moved back to near the opening levels peaking just above the 0.9390 area to set the range and then holding around the 0.9382 area for a great portion of the session. The moves higher were helped along by an increase in home loans for last month which came on the back of a large drop the previous month, the figure was above expectations and while not an earth shattering number is a reasonable indication of how well the current interest rate is working in the economy and retail sales numbers would confirm the general level of comfort.

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

JPY         Current Account (JPY) Sep A -0.13T | C -0.10T | P 0.35T

AUD       Home Loans Sep A 4.40% | C 3.50% | P -3.90% | R -4.00%

JPY         Eco Watchers Survey: Current Oct A 51.8 | C 54.2 | P 52.8             

 

Weekend News

CNY: China Output Growth Tops Estimates as Recovery Sustains Momentum
China’s Communist Party Meets to Map Out Economic Changes
Beijing to Ban Presale of Home Over 40,000 Yuan/Sq Meter: Xinhua
China Inflation Below Target as Leaders Start Reform Summit
China Auto Industry Capacity ‘Far Exceeds’ Demand, Xinhua Says
USD/JPY/CNY: Lew on Asia Visit Will Urge Japan, China to Reduce Surpluses
Fed Still Seen Tapering in March Even as Job Growth Picks Up
Iran:

Iranian Nuclear Accord Prospects Clouded After French Objections
Iran Ready to Finalize IAEA Negotiations Nov. 11, ISNA Reports
EUR:

Van Rompuy Says Solving Euro Crisis With More Debt ‘Won’t Work’
Portugal Rating Outlook Revised to Stable by Moody’s on Economy
Rajoy Says Lower Yields Mean Savings This Year of More Than EU6b
EUR/USD:

US-EU Trade Pact Won’t Happen Under Obama, WirtschaftsWoche Says
CNY/EUR:

Chinese Get 80% of Portugal Property-Investor Visas
JPY:

Japan Considers U.S.-Style IRAs to Boost Investment: Nikkei
Japanese Premier Abe Urges Speedy Revival in Fukushima
Japan Mulls Raising Public Funds Available to Tepco: Asahi
Japan’s TSE Considers Creating Night Stock Market: Nikkei
JPY/Asia:

Seven Bank Plans to Enter Southeast Asia ATM Business: Nikkei
AUD:

Australia’s Bishop Says Free Trade Deal With China Is Essential
Australian Christmas Spending May Increase 3% to A$40 Bln
NZD:

New Zealand’s Key Says No Spending War in 2014 Election Campaign
Asia/GBP:

Asian Buyers Splurge $65.5 Million in London Art Auction Battle

 

Harry Hindsight

  • EUR: The Euro opened around the 1.3420 areas having recovered from significantly further down. While the market remained in a tight range through Asia the volumes were reasonably above the norm. Moving slightly lower even if only slightly. The market moved around the 1.3410 level for the majority of the session into the grey hours where we saw the first major dip lower before the German trade balance touching the 1.3390 levels before steadily recovering and moving to a peak in early NYK just below 1.3440 post number. NFP when it arrived put the market in a spin for the second day and we dropped quickly to trade below 1.3320 triggering stops below 1.3360 having struggled at the levels for a good time. The market bounced off its lows to the previous holding area around the 1.3360 and then struggled from there into the close only slightly higher.
  • GBP: Cable moved higher on the opening around the 1.6090 areas and although it dipped to the 1.6080 mark into Tokyo the market held quietly between the two levels into the London official open. The market drifted on the German trade balance figures. A poor UK trade balance dipped the market to the 1.6060 levels as EURGBP made small gains over the coming hours into the NYK session; Cable held the 1.6070-80 levels and dropped quickly on the release of the NFP numbers. The market moved to the 1.6020 and held for a short period before again moving and pushing to below the 1.5960 levels as further numbers were released and the market went into a USD rally. The market bounced off the lows and managed to move back above the 1.6000 area before profit taking appeared in the market as we moved into the last couple of hours and pushed the Cable to above 1.6030 before settling back into the close around the 1.6010 levels.
  • JPY: Having opened around the 98.10 areas we managed to climb above the 98.20 levels before stalling and holding for a good portion of the Asian sessions, we saw plenty of volume even if the range remained tight. The move into London and indeed NYK had little bearing on movement as we remained firmly around the 98.10 areas and only some strong selling pre number opened up the range as they pushed the pair briefly to below 98.00 and they were wrong. With NFP coming in higher than expected and also a strong upward revision of the previous month the USD was strongly bid across the board. USDJPY moved quickly then jumped a few pips during midrise before holding the 98.80 area for a few hours into the next batch of releases and moving more steadily to above the 99.20 areas, the remainder of the session was fairly mute with the market remaining above or around the 99.00 level before closing just off the highs for the day. It was worth noting that although the offers we’d seen over the week around the 99.00 area were supposed to have disappeared with the previous day’s action in all likelihood these offers were from exporters and rematerialized during the days rise above 99.00.
  • AUD: As with the other currencies early trading was somewhat muted with the Oz market opening around the 0.9450 area and trading into the Tokyo session quietly higher before trading lower on the back of RBA readjustment of projected growth for the 2014 period, this caused the Oz to drop in early Tokyo to below 0.9430 before steadily rising and then jumping to above 0.9480 on the Trade balance release from CNY. Once the range was set the market settled into a reasonably quiet range moving from the 0.9450 area to 0.9470 into the London session with little in the way of surprises and then into NYK where the action was always going to start. The release had USD rallying against the AUD and we dropped quickly to below 0.9410 and unlike the other pairs steadily continued lower moving to a low in the mid 0.9350’s. The market recovered a little once all the data was out and we moved around the 0.9380 into a quiet close.

Friday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

CNY        Trade Balance Oct A $31.10B | C $22.30B | P $15.21B

CHF        Unemployment Rate Oct A 3.20% | C 3.20% | P 3.20%

EUR        German Trade Balance (EUR) Sep A 18.8B | C 17.2B | P 15.6B | R 15.8B

CHF        Retail Sales (Real) Y/Y Sep A 1.00% | C 2.60% | P 2.40%

GBP       Visible Trade Balance (GBP) Sep A -9.8B | C -9.1B | P -9.6B

CAD       Housing Starts Oct A 198K | C 195.0K | P 193.6K | R 196K

CAD       Net Change in Employment Oct A 13.2K | C 13.5K | P 11.9K

CAD       Unemployment Rate Oct A 6.90% | C 7.00% | P 6.90%

USD       Change in Non-farm Payrolls Oct A 204K | C 125K | P 148K | R 163K

USD       Unemployment Rate Oct A 7.30% | C 7.30% | P 7.20%

USD       Personal Income Sep A 0.50% | C 0.30% | P 0.40%

USD       Personal Spending Sep A 0.20% | C 0.20% | P 0.30%

USD       PCE Deflator Y/Y Sep A 0.90% | C 1.00% | P 1.20% | R 1.10%

USD       PCE Core M/M Sep A 0.10% | C 0.10% | P 0.20% | R 0.10%

USD       PCE Core Y/Y Sep A 1.20% | C 1.30% | P 1.20%

USD       U. of Michigan Confidence Nov (P) A 72 | C 74.5 | P 73.2

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. LMAX Group has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX Group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the produced information was obtained from sources deemed to be reliable, LMAX Group does not provide any guarantees about the reliability of such sources. Consequently any person acting on it does so entirely at his or her own risk. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.